Has Getting a Home Mortgage Still Too Difficult?

What Are the Difficulties Faced When Applying for a Home Mortgage?

Credit Worthiness

Before applying for a mortgage for their dream home, future homeowners should always be aware of mortgage lending standards.
Most lenders require a credit score of over 620 to qualify, and even higher scores are necessary for more favorable terms, such as
lower interest rates. Having a long credit history and an excellent record of making on-time payments are essential when obtaining
pre-approval for a mortgage.

You should also have a decent debt-to-income ratio, meaning you can comfortably afford other monthly payments like student loans
or credit card debt. Be sure to check your credit report and know your score before going into a meeting with a mortgage lender.

Employment History

Anyone looking at buying a home should have stable employment with a steady income. Lenders are only interested in supporting buyers
who can make timely payments, which usually means having been at your current job for at least two years.

Some lenders might be more understanding than others, but if you frequently change jobs or work as an independent contractor, you
may need someone else to co-sign your loan. This can be a parent or friend, but few people may be willing to take on that burden, so
that's something to consider before inquiring.

Mortgage Pre-Approval

Getting pre-approved for a mortgage is the best way to show the seller that you are serious about buying their home. When you find a
house you love, you'll be able to put in an offer immediately without worrying about whether or not you can obtain the mortgage. It can
help to kickstart the entire process.

In addition to the above requirements, you'll need to prove to the lender that you have enough cash in the bank to cover the down
payment and closing costs. A down payment is always a percentage of the home's total cost, and it usually hovers between 10% and 20%.

Knowing what you can afford to spend upfront is integral to figuring out which houses to look at during your search. Avoiding anything
out of budget will drastically reduce major disappointments down the road.

Why Are Mortgage Requirements So Strict?

After the housing market went bust in 2008, lenders were faced with a lot of blame. Many banks and mortgage lenders had knowingly
given aggressive and complex loan packages to people who couldn't afford to pay them back.

When the entire economy plunged into recession after the crash, it became clear that more oversight in the mortgage lending industry
was needed. It may be more challenging and arduous for eager homebuyers to secure a loan, but the rules are in place to ensure people
are only buying what they can truly afford to keep. In the end, it's a win for everyone.

If you're unsure if you can qualify for a mortgage, there's no reason not to take an informational meeting with a professional mortgage
lender. They'll be able to give you their honest opinion about your options.